The DC Circuit issued a decision on July 3, 2017, vacating the 90-day stay of the Oil & Gas Industry NSPS rules – the first rules to regulate methane from that sector.  In a June 5 Federal Register notice, the new Trump EPA stayed the rules pending reconsideration under Section 307(d) of the Clean Air Act.  Environmental Groups filed an emergency challenge to the stay, asking for either a stay of that decision or summary vacatur of it.  Issuing its decision less than a month later, the court vacated EPA’s stay of the rules.

The majority opinion first dismissed EPA’s argument that the stay is not reviewable by a court because it is not a “final” action.  Contrary to EPA’s assertion that the stay is simply an intermediate action in the reconsideration process that merely preserves the status quo, the court concluded that the stay itself has immediate legal consequences by allowing oil and gas facilities to cease efforts toward compliance, even though the reconsideration process is not yet complete.

After finding judicial review appropriate, the majority then held that a 90-day stay is only authorized under the Clean Air Act if reconsideration of a rule is mandatory because it was impractical to raise important issues during the rulemaking process.  Turning to the merits of EPA’s specific justification for the stay of the oil and gas rule, the majority determined that all of the issues that EPA used to justify the reconsideration and stay had already been raised and addressed during the rulemaking process.  As a result, the court determined that the reconsideration was not mandatory, and thus EPA had no authority to issue the stay.  However, the last paragraph in the court’s opinion confirms that its decision does not limit the ability of EPA to issue a stay of a rule as long as it follows notice and comment procedures, an action EPA has already proposed to take.

Judge Brown dissented to argue that the stay is not final agency action subject to review but simply preserves the status quo.  As a result, she would have concluded that judicial review of the stay must await review of the completed reconsideration action.  However, the majority’s decision now establishes precedent in the DC Circuit that will serve as mandatory authority for the other Clean Air Act rules recently announced for reconsideration and stayed under Section 307 by the Administration.

For more information regarding this important development, please contact Mack McGuffey or Margaret Campbell.